If your construction clients are working on government-funded projects, there’s a wage change taking effect this spring that’s worth knowing about.
Starting May 11, 2026, the federal contractor minimum wage increases to $13.65 per hour for non-tipped workers and $9.55 per hour for tipped employees.
This annual adjustment is tied specifically to Executive Order 13658 (the order that established a higher minimum wage on federal contracts).
For CPAs advising construction firms, this update has real downstream implications — from certified payroll compliance to labor burden recalculations.
That’s why Foundation Software created “Understanding the Federal Contractor Minimum Wage Update”— a practical breakdown of what changed, why it matters and how contractors can prepare.
This article covers:
- Distinguishing Wage Requirements: How the federal contractor minimum wage differs from Davis-Bacon prevailing wage requirements
- Coverage Rules: Why the 2026 update falls under Executive Order 13658 and how to identify which legacy contracts are affected
- Financial Strategy: How the increase impacts certified payroll, job costing, and project budgets
Helping your clients get ahead of this update can prevent payroll errors, compliance issues and unexpected budget overruns down the road.